The hedge fund manager compares the turnaround at JCP to that of The Gap (GPS) in the mid 1980's as that company had a broken model to fix, hired talented new management, implemented a strategy change, and after some poor results eventually turned around and the stock rose ~60x.

While JCP's first quarter was disappointing in terms of same store sales (SSS) and gross margin, Ackman is thinking long-term here and points to goals of growing sales and achieving ~40% gross margins. He also highlights that the dividend cut has caused forced selling by yield investors.

The hedge fund manager compares the turnaround at JCP to that of The Gap (GPS) in the mid 1980's as that company had a broken model to fix, hired talented new management, implemented a strategy change, and after some poor results eventually turned around and the stock rose ~60x.

While JCP's first quarter was disappointing in terms of same store sales (SSS) and gross margin, Ackman is thinking long-term here and points to goals of growing sales and achieving ~40% gross margins. He also highlights that the dividend cut has caused forced selling by yield investors.

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